Last week, Vitalik called out centralized exchanges in an interview with TechCrunch, with his statements catching many off-guard, including Binance’s CEO.

Vitalik Buterin, a co-founder of the Ethereum project, recently called out centralized exchanges in an interview with TechCrunch. Vitalik, a prominent Russian-Canadian programmer, has been well-known for his work in the cryptocurrency space, becoming an advocate for decentralization.

As a result of his ties to decentralization, the Ethereum co-founder expressed his hate towards centralized exchanges, while not naming any platform in particular. He said:

“I definitely hope centralized exchanges go burn in hell as much as possible.”

This statement given by Vitalik quickly blew up on social media, and soon enough, everyone had their own opinion on what Vitalik had to say. Eventually, Changpeng Zhao, the well-known CEO of Binance, got wind of what Vitalik had to say about a centralized exchange like his. 

On July 10th, he issued a lengthy Tweet giving his opinions on what the cryptocurrency personality had to say.

Got asked a few times, re: “Vitalik’s burn in hell”.

Let’s not wish others to "burn in hell". Let’s have a bigger heart, and appreciate the fact that we are part of an eco-system… pic.twitter.com/4QYGKus0Gk

— CZ (not giving crypto away) (@cz_binance) July 10, 2018

Firstly, CZ pointed out that the comment “burn in hell” wasn’t taken too nicely, asking for centralized exchange critics to “have a bigger heart.” The Binance boss wrote:

“I would not wish “burn in hell” on anyone or anything. That’s just not a nice thing to say, even if it was said by Vitalik.”

Zhao reasoned that all cryptocurrency community members are part of the same ecosystem, and it would be in our best interest to collaborate instead of propagating the infighting that has become a sort of calling card for the industry.

Secondly, the CEO noted that the cryptocurrency industry would be on levels of magnitudes different if centralized exchanges weren’t present. Exchanges like Coinbase and Binance have created high levels of liquidity for the industry, allowing for incoming retail investors to buy, sell and trade a variety of different cryptocurrencies. Additionally, centralized exchanges have become an integral part of the fiat on-ramp process, which became a leading factor in the most recent cryptocurrency run up.

As CZ puts it, “if it was not for fiat (and centralized) exchanges, the industry would be smaller and the industry would develop slower.”

This has been widely received as true, take a look at the top exchanges on CoinMarketCap, It easily becomes apparent that decentralized exchanges have not seen the levels of adoption which centralized exchanges have experience.

Vitalik recognized this in the aforementioned interview, noting that the only reason why centralized exchanges are still viable is due to the fact that they act as a gateway, bridging the gap between fiat and cryptocurrencies. The Ethereum proponent went on to say that decentralized exchanges will only become more and more prominent as time goes on.

However, CZ rebutted by saying that nothing is truly decentralized, and things that are “decentralized” are not safer (or better) by default. The CEO pointed to the example of Ethereum Classic and Ethereum DAO situation, where the decentralized autonomous organization fell victim to a security breach, causing a fork of the original Ethereum chain.

In addition, it was pointed out that efficiency and adoption rates are an important part of the centralized/decentralized debate as well, implying that if centralized exchanges are required for mass cryptocurrency adoption, then so be it.

Despite trying to address most of Vitalik’s points, CZ didn’t mention allegations of absurdly high listing fees that many exchanges require in the rebuttal. However, in an interview with Ran Neu Ner of CNBC Africa, Zhao gave viewers of the ‘Crypto Trader‘ show an insight into Binance’s listing process. He said:

“We don’t negotiate and we don’t ask for a price. When a project team submits an application, they will tell us what they want to pay. And you can say zero ($), which we may accept and we have listed coins that say zero. However, there’s a sweet spot for the money you pay. If it’s too high, then we actually get worried…. But we list coins for a fairly low fee”

It was not made clear where this ‘sweet spot’ lies, but many speculate it ranges in the $3-5 million range.

Despite taking a seemingly harsh stance on the current state of decentralization, Binance is still planning to move forward with its own decentralized project, Binance Chain.

In the aforementioned ‘Crypto Trader’ interview, when asked about the Binance Chain project Zhao noted:

“I believe that decentralized exchanges are the future. I do not know when that future will come, so again, I think we are in an early stage for that. I don’t know whether it’s going to be a year, two years, three years, five years, I don’t know, but we have to be ready for it. So we’re now actively investing our efforts and time into it. We have a dedicated team working on this, and I hope to see a prototype within the next couple of months”

It is unlikely that the first prototype of Binance Chain will be able to support the trade throughput levels the exchange sees today. But it is only a matter of time before protocols develop to a stage where average users, like you or I, do not notice any difference between the two types of exchanges, offering seamless decentralized services to the masses.

As the cryptocurrency space develops and expands, there will begin to be a shrinking need for centralized exchanges. But as seen by moves taken by Binance, currently centralized platforms may begin to migrate over to decentralization in an attempt to keep business.

But it is unclear what the timeline for decentralized exchange development will look like, as in their current state, decentralized exchanges can be rather slow and clunky. But once decentralized platforms show high levels of efficiency and security, centralized exchanges will only be known as fiat on-ramps, and platforms utilized by high-frequency traders, looking for millions of trades per second.

The post Binance CEO Rebuts Buterin’s Centralized Exchange Slur appeared first on NewsBTC.

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